In April, it received nearly 1 billion US dollars in investment, and the daily active users reached a new high. Will Web3 games make a strong recover
Original title: "Attracting nearly $1 billion in investment in April, with 3 million daily active users, is the bull market for Web3 games coming?"
Original author: flowie, ChainCatcher
Web3 games seem to have entered a strong recovery phase.
Recently, with the social mini-game Notcoin (NOT) backed by 900 million active Telegram users being launched on Binance and OKX, Web3 games have once again attracted large-scale attention in the crypto market.
According to Jack Booth, marketing director of the TON Foundation, compared to the 2 million daily active users of the first generation of Web3 game king Axie Infinity at its peak, Notcoin achieved 6 million daily active users during the mining phase, and the number of users grew to 35 million in almost 3 months.
On May 16, Notcoin official data showed that NOT’s market value exceeded $820 million just one hour after it was launched on various exchanges.
In addition to Notcoin’s astonishing growth, according to the April blockchain game report released by DappRadar and the Blockchain Game Alliance, the entire blockchain game market has a clear growth trend, with an average of 2.9 million independent active wallets (dUAW) per day in April, an increase of 17% from March.
Footprint Analytics data shows that the average daily active users (wallets/players) of blockchain games in April have exceeded 3 million.
In addition, the DappRadar report stated that the scale of investment in the blockchain game field in April reached $988 million, a record high since January 2021.
Two major venture capital firms raised nearly $900 million to save ammunition for Web3 games
The total investment in Web3 games in the first quarter of 2024 was around $288 million, and the total investment in April suddenly increased by more than 2 times, mainly due to the completion of a new round of fundraising by two major venture capital firms, a16z and Bitkraft Ventures.
On April 17, a16z announced that it had successfully raised a huge new fund of $7.2 billion, of which $600 million would be allocated to the gaming industry, including companies that develop new games, gaming platforms, gaming-related technologies, or other gaming industry innovations.
Regarding the use of the $600 million game industry investment funds, Andrew Chen, general partner of a16z and head of a16z Games Fund One, revealed that it will be used to create a second game fund, covering more diverse fields: from AI, Web3 games, VR/AR, 3D tools, game apps to studios, etc.
Earlier, Andrew Chen had also announced that he would invest a total of $30 million in multiple game companies, including Web3 games, through the a16z Speedrun program before May 19, and each startup joining the Speedrun program will receive $750,000.
RootData data shows that Web3 games are the second largest investment area in a16z's crypto investment after infrastructure, and at least 25 Web3 games have been invested so far.
Since the beginning of this year, a16z has participated in two Web3 game investments, one is the $13 million Series A financing of the doomsday NFT shooting game MadWorld, and the other is the $8 million financing of the gambling GambleFi ecosystem developer MyPrize.
In addition to a16z, another venture capital firm Bitkraft Ventures also announced the launch of its third game fund in April, which has raised $275 million and will focus on game studios, technologies and platforms in the seed and Series A stages.
Bitkraft Ventures also recently announced the introduction of two new executives to expand the Asian Web3 game market, namely Jin Oh, former president of Riot Games and CEO of Garena, and Jonathan Huang, former vice president of Temasek.
Bitkraft Ventures has been very active in investing in Web3 games. In 2021, Bitkraft Ventures raised $75 million and launched its first token fund to invest in blockchain games and digital entertainment. At the end of March 2023, Bitkraft Ventures raised another $220 million for its second "token fund."
So far, Bitkraft Ventures has publicly announced nearly 50 investments, most of which are in the Web3 game field, with representative cases such as YGG and Immutable.
Since the beginning of this year, Bitkraft Ventures has participated in the investment of four game projects: Metalcore, MadWorld, Avalon, and My Pet Hooligan. Among them, MadWorld was invested together with a16z.
Daily active users hit a new high. Which Web3 games are the leaders?
Amid the overall downturn in the crypto market, the number of active users of Web3 games is climbing.
a16z game investor Robin Guo quoted Footprint Analytics on the social platform and exclaimed: "The MAU (monthly active users) of Web3 games is 3.3 million, which is far higher than the peak previously created by Axie. If the data is not cleaned, I am sure that many of them are robots, but the recent growth led by Pixels is still impressive. It feels like this is really overlooked."
According to the DappRadar report, the dUAW (daily independent active wallet number) of Web3 games reached 2.9 million in April, a record high.
Among them, the top ten Web3 game applications ranked by UAW (unique wallet address) all have UAW exceeding 1.5 million. Pixels still has a strong dominant position, with UAW exceeding 20 million, followed by Sweat Economy and StarryNift, with UAW also exceeding 5 million.
Most of these 10 games were launched around 2020 and 2021.
Pixels is a pixel-style farm game launched in 2021. At the end of last year, it migrated from Polygon to the Ronin network. Ronin is the Ethereum Virtual Machine (EVM) chain developed by Sky Mavis, the developer of Axie Infinity. The growth of Pixels also makes Ronin the most active game chain at present.
Pixels was listed on Binance in February this year, and as of May 21, its fully diluted market capitalization was around $1.9 billion.
Sweat Economy is a fitness-themed move to earn game. It is a small game modified from a traditional fitness application chain with 100 million users. Sweatcoin is built on the Near chain.
StarryNift is an AI-enhanced co-creation metaverse platform that provides an immersive 3D virtual experience for gaming, creation, and socializing. The founder of StarryNift was a founding partner of Matrix and a co-founder of DEx.top. StarryNift has completed 3 rounds of financing, with investors including OKX Ventures, SIG Asia Ventures, Binance Labs, GBV Capital, BNB Chain Fund, Alameda Research, LD Capital, Coingecko Ventures, etc.
Another World was founded in 2021 and is a Korean Web3 metaverse project built on the Klaytn chain. It was originally named Terra World and has just finished public beta. According to public reports, Another World is supported by South Korea's Kakao Group and LG Group, with a large global user community of 200,000 and a powerful blockchain token system.
Alien Worlds is a relatively old space exploration game that integrates DeFi, NFT and DAO. In 2021, it received $2 million in financing from Animoca Brands, LD Capital and others. As of May 22, the fully diluted market value of its token TLM exceeded $100 million.
MotoDex is a motorcycle racing game built on the Ethereum sidechain SKALE. According to DappRadar data, its UAW in the past 30 days has exceeded Pixels.
Nine Chronicles is a veteran decentralized RPG (role-playing game) that has received two rounds of financing, with Binance Labs and Animoca both participating in the investment. As of May 22, the fully diluted circulating market value of Nine Chronicles' token WNCG is around US$70 million.
Apeiron is a card duel and god simulation game. In December last year, Apeiron announced its migration to the Ronin network. It completed a $10 million seed round of financing led by Hashed in 2022. On February 28, the public beta version of Apeiron Arena was released on the Epic Game store, and players can earn ANIMA airdrop points by downloading and participating in the competition. Its token APRS is online on Bybit, the decentralized exchange Katana of the Ronin blockchain. As of May 22, the fully diluted market value is $580 million.
Ultiverse is an AI gaming platform with a strong lineup of investors behind it. It has completed three rounds of financing, with a total of $1350. Binance Labs participated in two of the rounds, and IDG Capital, Animoca Brands, DWF Labs and many other well-known investment institutions participated in the investment. On May 3, the 24-hour trading volume of Ultiverse gold chip NFT exceeded 1100 ETH, ranking first on the BLUR transaction list.
World of Defish is a decentralized NFT game world running on the BNB chain, incubated by the decentralized IDO platform Poolz, and invested by Poolz ventures.
In addition to these 10 Web3 games with high UAW, the shooting mobile game Matr1x has also been outstanding in its monthly activity in the past 30 days. Matr1x received strategic financing from Animoca in February, and in the previous three rounds of financing, well-known institutions such as OKX Ventures, SevenX Ventures, Folius Ventures, ABCDE, and Hashkey Capital have participated.
Conclusion
Although there are also popular games such as Pixels and Notcoin in this round of bull market, there seems to be some gap compared to the phenomenal games such as Axie and STEPN that led the new paradigm of Web3 games at that time.
After the P2E period, the hot spots for venture capital investment in Web3 games are, first, 3A masterpieces that try to create a Web2 game experience, and second, full-chain games that are committed to putting all content such as game logic and game assets on the chain.
Currently, 3A chain games are also facing doubts that they are just capital speculation because of the cost of production and long landing cycle. On the contrary, short, flat and fast lightweight games such as Notcoin have attracted a lot of traffic. Will the next phenomenal Web3 game be born in social mini-games?
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